As a result of the financial crisis, there has been a widespread vilification of Wall Street "alchemy" and the related realization that there is little understanding among the general public of what financial innovation has accomplished. Addressing these two points is an excellent short paper, "In Defense of Much, but Not All, Financial Innovation" by the Brookings Institution's Robert Litan.
Writing in an accessible style easily understood by a layperson, Litan provides a nice overview and examination of the finance landscape, from basics such as bank deposits, credit/debit cards, and mutual funds to the development and use of collateralized debt obligations (CDOs) and structured investment vehicles (SIVs).
Despite the prevailing anti-finance backlash of the moment, Litan reminds us that there has been a lot of financial innovation in recent decades that have been beneficial, such as ATMs, credit cards, index funds, and the rise of venture capital. Positive financial innovations have increased convenience for customers, improved access to credit, better allocated risk, and contributed to economic growth.
On the flip side, Litan identifies socially destructive inventions like the misuse of adjustable rate mortgages (ARMs) with ludicrous interest rates; collateral debt obligations (CDOs) reliant on artifically inflated housing prices; and structured investment vehicles (SIVs) which were held off of a bank's balance sheet--thus circumventing regulation on minimum capital requirements--and reliant on the ability to rollover short-term debts.
Litan explains finance and the roots of the financial crisis very well, and his paper is full of interesting history and citations. For example, despite the popular reputation of private equity (PE) firms' as ruthlessly buying up companies, slashing jobs, and then selling the parts, research indicates that the majority of PE acquisitions are held long-term, that they maintain normal employment growth over time, and they contribute positively to economic growth.
In concluding, Litan argues that regulation shouldn't become so cautious as to stifle the creation of new financial innovation that could be socially useful--but that reactions to threats should be quicker. I agree. Check out his whole paper here.
Sunday, February 28, 2010
Saturday, February 27, 2010
Google Boosting IV
The latest in a series of occasional attempts to manage my web presence on Google's search engine...
Jay Nargundkar - my blog, Citizens Band
Jay Nargundkar - summary of my professional experience on LinkedIn
Jay Nargundkar - Dreamfly is an international development organization I am volunteering for
Jay Nargundkar - archive of my opinion columns at the University of Maryland's student newspaper, the Diamondback
Jay Nargundkar, Jay Nargundkar - Brookings Institution online discussions I've participated in
Jay Nargundkar - summary of my professional experience on LinkedIn
Jay Nargundkar - Dreamfly is an international development organization I am volunteering for
Jay Nargundkar - archive of my opinion columns at the University of Maryland's student newspaper, the Diamondback
Jay Nargundkar, Jay Nargundkar - Brookings Institution online discussions I've participated in
Wednesday, February 17, 2010
Context Matters
Recently, there's been a minor kerfuffle reported in the news over the use of the word "retard" by prominent newsmakers like Rahm Emanuel, Sarah Palin, and Rush Limbaugh. The ensuing controversy has led to a publicized backlash against the so-called "R-word". Amidst the hubbub though, this weekend in the Washington Post came a refreshingly level-headed column by Ohio State law professor Christopher Fairman, about the controversy. While his explanation of the evolution of "retard" from politically correct to incorrect is interesting, it's his examination of word taboos in general that I find most interesting.
Fairman points out what is obvious to most of us: that phrases like "that's so retarded" or "that's so gay" are typically not meant as insults to the mentally disabled or to homosexuals, respectively, but are meant as generic put-down words. I don't condone incivility or homophobia, and I don't think Fairman is granting a free pass to the users of those words--rather, just pointing out that the use of those words has a casual, inoffensive context (what he terms "readily identifiable alternative meanings"), and is not indicative of the user's personal insensitivity or bigotry.
We can all agree that reducing the frequency of saying phrases like the examples cited would be a good thing, making our discourse more polite. However, usage of the phrase is not by itself indicative of malicious intent. Given that we live in a culture that is all too often too quick to look for and take insult, it would be helpful to remember that words themselves are not the problem, but the meaning behind them
Context matters. That's what I thought a few weeks ago when I heard about NBC apologizing for its cafeteria menu offering fried chicken and collard greens on its Black History Month menu. Although I initially raised my eyebrows, I then asked myself, is this actually racist? Was there a malicious intent? Are those foods not historically associated with blacks in America, at least in the South? Would there have been similar complaints if Salvadoran History Month featured pupusa specials, or Indian History Month featured dosas? How exactly--if at all--do you want to teach a history lesson through a cafeteria meal? It turns out the NBC menu was personally created by the cafeteria chef, a black woman, who had specifically requested to have that offering for one day. Clearly there was no ill-will or patronizing stance coming from her.
All too often people forget about intent before crying "racism!" or whatever other grounds for offense they are taking. Again, to be clear, if ill will was actually meant and a person is purely spewing noxious hate, I am against that, and that kind of speech or action should be challenged. Regardless, I think it would be definitely helpful for people in general to not get offended so easily--toughen up mentally! Ultimately, words or ideas only have what power you accord them, and if you don't let the mere sight of one affect your psyche, then you immediately defuse its destructive potential. Put in simpler terms: shrug it off. Crisis averted.
Fairman points out what is obvious to most of us: that phrases like "that's so retarded" or "that's so gay" are typically not meant as insults to the mentally disabled or to homosexuals, respectively, but are meant as generic put-down words. I don't condone incivility or homophobia, and I don't think Fairman is granting a free pass to the users of those words--rather, just pointing out that the use of those words has a casual, inoffensive context (what he terms "readily identifiable alternative meanings"), and is not indicative of the user's personal insensitivity or bigotry.
We can all agree that reducing the frequency of saying phrases like the examples cited would be a good thing, making our discourse more polite. However, usage of the phrase is not by itself indicative of malicious intent. Given that we live in a culture that is all too often too quick to look for and take insult, it would be helpful to remember that words themselves are not the problem, but the meaning behind them
Context matters. That's what I thought a few weeks ago when I heard about NBC apologizing for its cafeteria menu offering fried chicken and collard greens on its Black History Month menu. Although I initially raised my eyebrows, I then asked myself, is this actually racist? Was there a malicious intent? Are those foods not historically associated with blacks in America, at least in the South? Would there have been similar complaints if Salvadoran History Month featured pupusa specials, or Indian History Month featured dosas? How exactly--if at all--do you want to teach a history lesson through a cafeteria meal? It turns out the NBC menu was personally created by the cafeteria chef, a black woman, who had specifically requested to have that offering for one day. Clearly there was no ill-will or patronizing stance coming from her.
All too often people forget about intent before crying "racism!" or whatever other grounds for offense they are taking. Again, to be clear, if ill will was actually meant and a person is purely spewing noxious hate, I am against that, and that kind of speech or action should be challenged. Regardless, I think it would be definitely helpful for people in general to not get offended so easily--toughen up mentally! Ultimately, words or ideas only have what power you accord them, and if you don't let the mere sight of one affect your psyche, then you immediately defuse its destructive potential. Put in simpler terms: shrug it off. Crisis averted.
Tuesday, February 09, 2010
Introducing Dreamfly
It didn't take me too long to be immensely impressed by what Dreamfly had been able to achieve in such a short amount of time, as well as realize that I wanted to help out. Since initially discussing Dreamfly's use of social media and offering fundraising suggestions, I have gradually taken on a bigger role over the past few months. Currently, I am leading marketing and outreach efforts for Dreamfly, and am offering my input on strategic decisions related to business, technology, and communications.
Among my early outreach efforts has been an attempt to get Dreamfly covered by a major news media outlet. A month ago, I reached out to Nick Eaton, a reporter at the Seattle Post-Intelligencer, explaining Dreamfly and its mission. I asked him whether he would be interested in covering us. After some email correspondence, we were able to set up a meeting between him and Dreamfly's co-founders, the amazing duo of Umaimah Mendhro and Mona Akmal. The resulting article was published Monday night, and I am thrilled! Read about Dreamfly, our mission, and blending non-profit assistance with social enterprise.
If you are interested in finding out more about Dreamfly, I urge you to get in touch with me. You can also take a look at our website, Facebook page (become a "fan"!), and blog. We are still a nascent organization run by a handful of volunteers, all of whom have other, full-time lives--hopefully this is an indicator of the passion we have for Dreamfly and how much we believe in its mission. If you would like to help, get in touch with me, and I'd be happy to talk with you about how you could get involved in a way you find meaningful.
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